After two years of litigation, local citizen environmental groups in Colorado’s remote San Luis Valley (SLV) reached an agreement yesterday with the Bureau of Land Management (BLM) that concluded the groups’ lawsuit which challenged BLM’s failure to adequately protect the Conejos aquifer an communities when approving an oil and gas proposal in 2014. The complaint challenged the BLM’s approval of an Application to Drill (APD) that included an Environmental Assessment which claimed drilling through the Conejos aquifer would result in “No Significant Impact.” Yet hydrogeologic studies confirm that drilling threatens the Conejos Formation aquifer―the lifeblood of the unique SLV aquifer system.

In 2006, BLM leased 540 acres of public mineral rights to Dan A. Hughes Oil, out of Beeville, TX. The lease tract was located outside the town of Del Norte, CO, near San Francisco Creek, a tributary to the Rio Grande. The San Luis Valley Ecosystem Council (SLVEC) and Conejos Clean Water (CCW), who initiated the lawsuit in March 2014, have now entered into a Joint Stipulated Agreement and Motion for Dismissal with the BLM that was granted by the Federal District Court of Colorado, dismissing and closing the case on June 2, 2016.

The agreement confirmed that the challenged APD and the underlying mineral lease expired by their own terms earlier this year. Both parties agreed that the termination of the APD and lease cannot be retroactively extended or renewed and neither are subject to appeal or judicial review. Should BLM wish to lease these same lands again for mineral development, BLM would have to “re-nominate the lands for inclusion in a future competitive lease sale.” The Dan A. Hughes Company has confirmed this understanding as well, stating that “Dan A. Hughes Company, L.P.'s Permit to Drill on BLM Lease COC69530 and the Lease itself have expired."

“We are relieved that this particular wildcat play has come to an end. There have been significant changes in the BLM leasing process since 2006 and the public will now have an opportunity to protest before a parcel gets leased, something that didn’t happen last go-round,” said Christine Canaly, Director of SLVEC. “Our organization has been dealing with these drilling threats around the San Luis Valley since 2007. We need to remain focused instead on the future of renewable energy development here, not fossil fuels. Protecting our aquifers is important to us and requires that we stay vigilant here at the headwaters.”

The uniqueness and importance of the Conejos Formation aquifer is well known. In 2012, facing the threat of wildcat oil and gas proposals seeking to strike it rich, a $100,000 Rio Grande Hydrogeologic Study was requested by Rio Grande County Commissioners through the Rio Grande Roundtable and funded by the Colorado Water Conservation Board. The authors made a comprehensive list of recommendations

including intermediary casing to protect the Conejos underground formation, in some areas believed to be about 5,600 feet deep. Such a casing is a key priority that emerged from the study, yet was not incorporated in BLM’s analysis or 2014 approval of the APD.

Although not resolved in this lawsuit, unique aquifers, endangered species, and the environmental justice concerns will trigger provisions of federal law that require BLM to prepare an Environmental Impact Statement and consult with the Fish and Wildlife Service before deciding whether or not to lease federal oil and gas in the SLV.

Unlike most of Colorado, the SLV has not had any appreciable oil and gas development. The Valley is populated with small rural farming and ranching communities that rely extensively on underlying aquifers for their livelihood. The agricultural traditions in the SLV have endured for centuries, and deserve protection from the boom and bust of oil and gas speculation.

“Community voices have made a difference,” says Justin Garoutte, Executive Director of CCW, “This is an Environmental Justice victory, and, as a result, we have human health protection from chemicals that would have been introduced into the groundwater through exploratory oil and gas drilling on public land. Disparate health impacts on the vulnerable populations of the entire San Luis Valley from oil and gas exploration have been avoided. Our communities have been here, in some cases for eight generations and a company simply comes in and acquires a mineral lease. Overnight, this action could have changed community dynamics for generations to come.”

The SLV holds some of the largest concentrations of wetlands in the Southwest United States that support numerous unique and endangered species and thousands of migrating birds each year. The Valley is currently experiencing a growing recreation and tourism sector. The coalition of people represented by SLVEC and CCW includes Valley ranchers and farmers, business owners, property owners and other concerned citizens. Energy & Conservation Law attorneys Allison Melton and Travis Stills represented the groups in the litigation.

SLVEC's Lawsuit is Working Towards Resolution:

Controversial oil-gas plan quietly ends

Company’s permit to drill and lease have expired

by Matt Hildner The Pueblo Chieftain

Published: April 24, 2016;Last modified: April 24, 2016 04:00AM

DEL NORTE — A contested oil and gas proposal in the foothills above town may have come to a quiet end last month.

The U.S. Bureau of Land Management sent notice to Texas-based Dan A. Hughes Co. that its 2014-issued drilling permit had expired.

Likewise, the lease the company had taken out to access the subsurface in 2006 also expired.

The company had proposed drilling a 6,600foot well roughly 5 miles south of town near San Francisco Creek. The proposal earned approvals from state regulators in 2012 and from the BLM in January 2014.

But it also prompted a lawsuit from the San Luis Valley Ecosystem Council and Conejos Clean Water, alleging that BLM had mishandled its analysis in issuing the company a lease and in approving the drilling.

Moreover, the groups argued, the agency did not adequately reveal or consider a requirement to case the well and protect the region’s groundwater or properly consider environmental justice concerns.

The agency and the lawsuit plaintiffs are due back in court May 20 for a status update.

Chris Canaly, director of the ecosystem council, said the group’s attorneys were waiting for clarification from the agency on whether the permit and lease could be renewed by the company before dismissing the lawsuit.

The company did not return a message from The Pueblo Chieftain.

While the San Luis Valley has been home to leasing activity in the last decade and even an exploratory well northwest of Del Norte in 2013, the last commercial production came in 1985.

That well, also near Del Norte, produced 1,855 barrels of oil in a four-month period before shutting down.